Economic Logic, Too

About Me

I discuss recent research in Economics and various events from an economic perspective, as the name of the blog indicates. I plan on adding posts approximately every workday, with some exceptions, for example when I travel.

Friday, April 18, 2008

Zapatero's Socialist party won the recent elections in Spain, and he appointed a cabinet with a majority of women. Quite a feat in such a machist country. Or maybe because it is a machist country, Zapatero, who has championed equal rights, is acting like he preaches.

Where this cabinet really pushes the envelope is with the defense minister: Carme Chaón, is a woman, is young (37), and seven-month pregnant. To top this, she is a self-declared pacifist. How could we rationalize such a choice? Economics has something to say here.

Spain has been burned by the Iraq adventure, and clearly it now wants to find a way to commit to a different course. But that is difficult, because once in power a government gets dragged into decisions it would not have taken beforehand, what we call time inconsistency. There are two ways to counteract this: find a commitment device, or appoint a decision-maker who is biased against what you want to prevent. This is why central bank governors are typically biased against against inflation. In this case, we have a pacifist.

I am all for a pacifist. War in way overrated. In a similar fashion, a cabinet minister in charge of agriculture should not be a farmer, and the one in charge of the environment should not be an industrialist. Too much self-interest involved.